Ordering from vendors and distributors virtually ground to a halt back in May at many retailers. Almost two months later, many dealers are still keeping orders to a minimum as tariff uncertainty continues.
Smaller retailers are most likely to hold back orders. As one manufacturers’ rep noted, “If you are a dealer who used to buy eight at a time you are probably buying two or four. They [dealers] are waiting for an opportunity or a reason to stock up, and manufacturers are just not able to give them deals.”
One rep said, “Half my retailers are really watching inventory and only buying at freight level. If someone has a $1,000 freight policy, those are the orders coming in.”
An example is Ricky Smith’s Audio, LA. Alan Benit said, “We’re doing our very best to literally order one to show and one to go, depending on the price point of the item, and to not have deep inventory on anything. Tariffs are going back and forth. Some vendors are raising prices and some are holding off as long as they can. It’s a lot of uncertainty for everyone.”
The fear, of course, is that there will be a sudden reversal in tariff policy, which will leave retailers loaded with inventory at a higher than market price.
Sound Sensations, GA all but stopped buying earlier this year, for fear that tariffs could reverse with a quick stroke of a pen. Now, owner Mark Vickers buys just enough to get by. “We’re learning to adjust to leaner ordering in general,” he said.
Others are returning to normal sales levels despite the tariff ups and downs. Mobile Music, WA Shawn Gunnels said, “We had slowed our ordering process with most of our vendors waiting to see what the tariffs were going to do. Sales have been steady and inventory levels needed to be filled, so ordering has now resumed to normal.”
Ed Weber of 5-store FOSS Audio is also ordering at traditional levels. “What really made me go ahead and start ordering is no one knows what it will be tomorrow morning. This is something we really can’t plan for…and when it hits the shore, that’s months away and we can’t not order product for months. We’ve seen progress that gave us hope that it will keep moving in the right direction. So instead of trying to time something that’s extremely volatile, we won’t throw caution to the wind, but we’ll continue moving our business forward. Business is good right now!”
One distributor said, “Dealers trying not to buy is not good for anyone. Not having product to do a job is more detrimental than paying more for it. I would rather have the product than turn someone away. The dealers who have been in business a long time know this.”
Dean Magnussen of Sound Warehouse, UT is one of them. Back in June, he said, “Our strategy is not to run out of product….”
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Anybody seeing any significant manufacturing coming back to the US?
Me neither.
Dealers are making a mistake not buying now. The current pause in the tariffs is simply the same amount as they have been paying since Trump’s last term. There’s a 25% tariff and a 10% duty which is the same as it’s been for more than six years. So right now is the best that it’s gonna get. Too many people don’t understand where the teff were four years ago and duty has been on before those tariffs.